Wondering how and if the current Real Estate Market in the United States will affect that of Puerto Vallarta?! Join our Real Estate Professional, Gary Shirk, as he explains everything you want and need to know!
With the Real Estate market in Puerto Vallarta holding strong since the COVID comeback in 2021, it is hard to imagine a dip in interest and demand. Puerto Vallarta Real Estate sales are simply booming! It appears everyone is buying a piece of paradise, not just to enjoy the laid-back lifestyle Puerto Vallarta has to offer but also the incredible investment that these properties are becoming. Currently, the US housing market and homeowners are experiencing something a bit different than what we are experiencing here in Puerto Vallarta.
Our Real Estate Professional, Gary Shirk, has decided to look at what is happening in the U.S. in regard to the housing market. In his video (linked below), Gary compares the U.S. housing market to that of Puerto Vallarta, seeing what the similarities and differences are and if there’s any room for concern where the Puerto Vallarta Real Estate market is concerned. Basically, will what is happening in the U.S. housing market affect us here in Puerto Vallarta?! In short, no.
Between June 2020 and January 2022, the US Housing Marketing saw what is considered a “Seller’s Market”, where there was low inventory and high property values. With the rise of interest rates and the cooling of the Real Estate market, demand has dropped, and available inventory has increased. This comes after a couple years of very low inventory. This downturn seems to be strictly US.
Puerto Vallarta inventory remains low, as demand to invest in the Puerto Vallarta Real Estate market is incredibly high. Our inventory has been on a downward track since 2020, and we are now at record low numbers, despite the constant construction of new developments. Because of this, we don’t see downward pressure being put on prices like we are seeing in the United States.
There are a few outcomes that can come out of the downturn of the U.S. Housing Market. One scenario is that the downturn does affect Puerto Vallarta. More houses come on the market, inventory goes up, and prices drop.
After Gary’s analysis, it is expected that the effect on our Real Estate market here in Puerto Vallarta will be minimal. There are multiple characteristics special to the Puerto Vallarta Real Estate market that make it somewhat resistant to the problems we are currently seeing in the United States. As Gary specifies, the median sales price of properties in Puerto Vallarta rose at a much steadier and sustainable pace in the last few years than that of the United States. While the median sales price of properties in Puerto Vallarta rose 6% since 2019, the median sales price of properties in the United States rose a whopping 12%! Because of this, it is expected that the Puerto Vallarta median sales price will not fall at the same rate as the United States.
Unlike in the United States, most sales in Puerto Vallarta are cash, with mortgages seldom the situation. In times of economic downturn, most homeowners in Puerto Vallarta have the financial freedom, if you will, to weather the storm. This keeps inventory low, as these homeowners are not itching to sell their properties like they perhaps would if a mortgage or something similar was involved. Relatedly, many properties in Puerto Vallarta are second homes and most homeowners rent out their properties when not in use. This makes it less likely for homeowners to sell their properties, as they are huge money makers. This will help keep inventory low, and thus, prices stable.
Property values in Puerto Vallarta have skyrocketed over the last few years, and those who purchased property within the last few years and even prior, have seen a huge, HUGE, return on investment. Whether homeowners are renting out their property or reselling their property at a higher value, the return-on-investment potential of Puerto Vallarta Real Estate has no limit.
For those looking to invest in Puerto Vallarta Real Estate, there has never been a better time. Despite the current state of the U.S. housing market, the Puerto Vallarta Real Estate market is holding incredibly strong, and we don’t see signs of downturn. Your property investment in Puerto Vallarta is a safe investment that offers many buyers a strong return on investment year round. Want to keep to your eye on the Puerto Vallarta Real Estate market to see how the U.S. Housing market affects it? Contact our Real Estate Professional, Gary Shirk, who is keeping an eye on this trend!